Inside Whitehall: With a nudge, government hopes to accomplish more than regulations ever could

Oliver Letwin's speech was erudite and philosophical

Share

There is a joke that does the rounds in Whitehall that there is no phrase more likely to spread fear down the corridors of power than: “Oliver Letwin has given a wide-ranging speech”.

Such is the fear of the Minister of State for Policy’s erudite mind and views that he is usually encouraged not to share them with the outside world. So when Mr Letwin does venture out of the Cabinet Office to speak to a wider audience he is worth listening to – and not just on “gaffe watch”.

And so it was last week when he addressed the Institute for Government on the deliciously broad subject of “the role of the state”.

Now it should be said that Mr Letwin easily got through this ordeal without uttering anything that could be described as news.

But what he said was neither boring nor unimportant. It was both erudite and posed an interesting philosophical question about the future direction of government.

Mr Letwin’s argument was this: until the fall of communism the great debate about the role of the state was between Marxism on the one hand and capitalism on the other.

Marxists believed that the state should control all means of production while extreme capitalists believed that outside the realms of defence and justice it should control almost none.

Then the end of the Cold War and the transformations in China put an end to such polarisation and in its place a more nuanced political dichotomy emerged.

In Britain that was played out between those who believed it was the job of the state to regulate markets for social and environmental purposes and those who favoured a laissez-faire approach. This was perhaps best exemplified by New Labour’s plan to bring in a minimum wage and the Conservatives’ opposition to it.

But Mr Letwin’s argument was that now, even this is a false dichotomy and that there is a “third”, better way by means of which governments can intervene in free markets and influence behaviour without law and regulation.

To support this he highlighted some new areas of Coalition policy.

He talked about the work of behavioural insights – or nudge theory – which has been used by the Government to achieve results that would otherwise have been brought about by regulation. An example of this is would be HMRC’s work to increase the number of people who pay their tax on time without fining them or new methods to motivate people back into work.

Mr Letwin also talked about neighbourhood planning – where communities can come together to decide where they want development to take place within their localities – without the need for planning committees to decide for them.

To this, you might add, the Government’s controversial payment-by-results model in areas such as drug addiction. This does not rely on regulation – it is the Government saying to a private provider: this is the outcome we want and how you do it is up to you.

None of this is to agree with Mr Letwin. But the Civil Service is much more attuned to this type of thinking than it was in the past. If Labour is re-elected this may change as, from what we know, regulation is still the approach favoured by Ed Miliband.

But before that happens there should be a debate about whether Mr Letwin is right – and what role we want government to play in our future lives. He should be unleashed more often.

React Now

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Recruitment Genius: Salesforce Developer

£50000 - £65000 per annum: Recruitment Genius: Due to continued business growt...

Recruitment Genius: Internal Sales Executive

£20000 - £22000 per annum: Recruitment Genius: An exciting opportunity has ari...

Recruitment Genius: Sales Executive

£20000 - £25000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

Read Next
Rachel Hollis posted a photo of herself in a bikini on holiday online with the caption 'I'm proud of this body and every mark on it'  

At last there’s a new ‘bikini body’ ideal – and it’s one with stretch marks

Victoria Richards
Ed Miliband contends with difficult questions from Jeremy Paxman  

Battle for Number 10: Miliband survives a rough ride but Cameron takes the edge in first TV battle

John Curtice
The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss